The FBI is Worried Criminals Might Use the Private Cryptocurrency Monero

Jan 31, 2017 at 11:00 UTCUpdated Feb 1, 2017 at 12:55 UTC. The privacy-focused digital currency monero has captured the attention of the Federal Bureau of Investigation, which has expressed concerns over its use among criminals.

Joseph Battaglia, a special agent working at the FBI's Cyber Division in New York City, said during an event last week that widespread use of the increasingly popular cryptocurrency might impact the way the agency conducts investigations.

"There are obviously going to be issues if some of the more difficult to work with cryptocurrencies become popular. Monero is one that comes to mind, where its not very obvious what the transaction path is or what the actual value of the transaction is except to the end users."

Launched in April 2014, monero is a cryptocurrency with enhanced privacy features.

The cryptocurrency saw its price soar in 2016, climbing from about $0.50 at the beginning of the year to about $12, a 2,760% increase.

Of those, 75% involved bitcoin, he said, though he mentioned litecoin and monero as other cryptocurrencies the agency has encountered thus far.

Battaglia's statements came after his "High-level" account of a typical cryptocurrency investigation given at the event, which one of a series of blockchain workshops co-hosted with IBM. Other panelists included Brigid McDermott, vice president of blockchain business development at IBM; Dan Ramsden, a Fordham Business School adjunct professor; and Gregory Xethalis, a partner at law firm Kaye Scholer.

Following the event, the special agent said he couldn't provide additional details specifically pertaining to the FBI's investigative techniques surrounding monero when asked by CoinDesk.

During the panel Battaglia described the FBI as "a reactionary organization", adding that, instead of trying to predict the direction that cryptocurrency use might go, the agency has adopted a wait-and-see approach.

CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.